Diabetes mellitus is an escalating global health problem. Both Type 1 and Type 2 diabetes lead to the gradual loss of insulin-producing beta cells. Our long-term goal is to develop beta cell replacement strategies to overcome the insulin deficiency in diabetic patients. To achieve this goal, we have developed novel, safer approaches to convert patient fibroblasts to induced pluripotent stem cells (iPSCs) using chemicals together with genetic factors. These iPSCs can be differentiated into multipotent pancreatic progenitors, the precursors to beta cells, using protocols developed for human embryonic stem cells (hESCs). However, our understanding of the basic biology of pancreatic progenitor cells is still rudimentary, which presents hurdles in the development of effective strategies to expand and further differentiate these progenitor cells for therapy. Evidence emerged from our own studies and from those of other laboratories suggests that pancreatic progenitor cells are heterogeneous, and likely consist of subpopulations with different physiological functions. Yet, molecular and functional distinctions between these subpopulations are poorly understood. It is unclear which subpopulation(s) in the developing pancreas is(are) capable of generating functional beta cells, and to which extent a specific subpopulation is capable of self-renewal. Even less is known about the physiological functions and self-renewal properties of pancreatic progenitor cells differentiated from hESCs. We aim to address these critical questions in this proposal. We hypothesize that the pancreatic progenitor cell compartment in vivo contains heterogeneous subpopulations: (i) a common multipotent pancreatic progenitor responsible for generating all three pancreatic lineages; and (ii) distinct lineage-specific progenitors responsible for generating one or two specific pancreatic lineages. Based on this hypothesis, the overall objective of this proposal is to define pancreatic progenitor subpopulations in terms of their molecular characteristics and physiological functions, as well as to identify mechanisms for self-renewal. We anticipate that our study will yield the following outcomes. Aim 1 will reveal the presence of distinct pancreatic progenitor subpopulations both during embryo development and in hESC differentiation culture. This will identify the progenitor subpopulation(s) capable of generating functional cells. Aim 2 will identify cell surface markers for enrichment of the appropriate progenitor subpopulation(s) for further ? differentiation into ? cells, and set the stage for studies on expansion of progenitor cells. Aim 3 will elucidate the mechanism of self-renewal of distinct progenitor subpopulations, which are critical for the development of novel, effective strategies to expand pancreatic progenitors for beta cell replacement therapy. Additionally, the ability to generate a large quantity of human pancreatic progenitor cells will provide a new way to study the biology of these cells to complement mouse genetics approaches. Broadly, the proposed research will lead to novel findings to fill in critical gaps in our current knowledge of human pancreatic development.